China readies gold exchange-traded funds
January 26, 2013, 11:08 am

The move will be part of government efforts to boost the development of both the gold market and the capital market.

China is the world’s biggest gold producer and consumer, with its gold output reaching 360.96 tonnes in 2011, according to the China Gold Association.

There is no specific timetable yet for the listing of gold ETFs, or mutual funds traded on stock exchanges that track the price of gold and have most of their assets invested in gold, according to an official from the China Securities Regulatory Commission (CSRC).

Gold ETFs are operated in most of the world’s major financial markets, with a combined asset scale of more than $140 billion as of the end of July 2012, according to a CSRC statement.

China’s rapidly growing gold market has created conditions for the development of gold ETFs, said the statement.

The value of gold product transactions surged 53.45 per cent year on year to 2.48 trillion yuan ($395 billion) at the Shanghai Gold Exchange, the country’s major gold bourse, in 2011, the association said.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.